The federal Rural Health Clinic (RHC) Program, established in 1977, pioneered important new approaches to providing and paying for healthcare in rural areas. Targeting rural Medicare and Medicaid beneficiaries with inadequate access to primary care services, the RHC Program introduced rural-relevant policy tools including cost-based reimbursement for small primary care providers and a team-based care model that partnered nurse practitioners and physician assistants with primary-care physicians as a requirement for recognition as a Rural Health Clinic. Since the program’s inception, Rural Health Clinics have become an important source of primary care with 4,482 RHCs serving 2.17 million Medicare beneficiaries in 2019.The program, however, is showing its age and needs updating to remain relevant and effective in the current health care market.
Although Rural Health Clinics remain relevant to the needs of rural areas, the primary care environment has evolved since its inception. Modernizing the program would help Rural Health Clinics to succeed under value-based payment systems that tie reimbursement to the quality of care provided and reward providers for efficiency and effectiveness. This article suggests opportunities to do so by building on its foundation of team-based care and rural-relevant payment models, encouraging Rural Health Clinics to participate in practice transformation and quality reporting initiatives, and enhancing the capacity of the clinics to serve rural communities.
As the foundation of a high-performing health system, primary care is necessary to achieve the quadruple aim of health care – enhanced patient experience, better outcomes, lower costs, and improved clinician satisfaction. Rural primary care providers have assumed a greater role in providing essential services including mental health, substance use, and chronic care management as well as supporting population health by providing wellness services, immunizations, counseling, screening for asymptomatic disease, and preventive care to assist patients in avoiding preventable conditions. The use of electronic health records, patient registries, and digital health, including telehealth, to provide services has grown dramatically as has interest in team-based care, including the use of community health workers, and an emphasis on value instead of volume.
The Rural Health Clinic Program is grounded in traditional fee-for-service medicine in which clinic viability remains tethered to service volume. RHCs are called upon to fill gaps in rural delivery systems by providing mental health and substance use treatment, chronic care management, and dental sealants. RHCs are challenged to fill these expanded roles due to their traditional staffing patterns and ongoing workforce shortages.
The evolution from volume (focused on acute care) to value (keeping people healthy) has also challenged RHCs as has demands for quality reporting. RHCs have struggled to offer chronic care, public health, and population health services which are fundamental to Accountable Care Organizations and other value-based payment models. RHCs have historically been exempt from Medicare quality reporting programs such as the Merit-Based Incentive Payment System. The cost of training new staff, updating electronic health records, and implementing new quality measures have further hindered Rural Health Clinics’ participation in these new models of care.
Modernizing the RHC Program
The Rural Health Clinic Program provides an ideal platform to test new models of rural primary care by:
Incentivizing the delivery of high-value services (mental health, substance use, chronic care management, prevention/wellness, and public health) by designating them as RHC primary care services.
Reviewing Rural Health Clinics’ guidance and policies to modernize program performance and eliminate unnecessary and outdated regulatory barriers.
Enacting payment reform to support team-based care, use of community-health workers, and delivery of essential services by lessening the reliance on fee-for-service volume, contributing to fixed costs, encouraging provision of population and public health services, expanding telehealth use, and incentivizing RHCs to report quality and performance data. A hybrid reimbursement formula involving fee-for service, capitated (a per member population health fee), and pay-for performance funding streams for Medicare and Medicaid patients could support these goals. Ultimately, this model could be migrated to a comprehensive population-based payment model.
Implementing a national data system to monitor RHC quality, financial, and safety net (service to low income and vulnerable populations) performance using a standardized set of RHC measures relevant to their performance.
Supporting RHC safety net activities, particularly in communities without traditional safety net providers.
Encouraging the Center for Medicare and Medicaid Innovation to develop RHC demonstrations and allow, where appropriate, RHC participation in existing demonstrations and practice transformation initiatives.
Developing an RHC technical assistance program to assist with practice transformation, improve RHC financial, operational, quality, and population health performance; and adapt to changing delivery system and market demands. The state-based grant program supporting Critical Access Hospitals funded by the Medicare Rural Hospital Flexibility Program provides a model for this program.
These changes, if implemented, would modernize the RHC program, enhance the ability of RHCs to meet the needs of their rural communities, and assist them in the transition to value-based systems of care.
John Gale is senior research associate and director of policy engagement for the Maine Rural Health Research Center within the Population Health & Health Policy Program at the University of Southern Maine’s Cutler Institute.
Republish our articles for free, online or in print, under a Creative Commons license.
You may republish our stories for free, online or in print. Simply copy and paste the article contents from the box below. Note, some images and interactive features may not be included here. Read our Republishing Guidelines for more information.
Commentary: Modernizing the Federal Rural Health Clinic Program